Celebrating 10 years! 2007-2017

Buying a gun with company money as a single member S-corp

I've been doing a little research on the 'net and I plan to bbkbbk01/09/17
Not an accountant, not a CPA, but my business experience is qdllc01/10/17
Glock 19 broke my thumb. I have a hitcher's thumb and the s mtobeinf01/10/17
My "home" pistol is a .38 special revolver. I was thinking o bbkbbk01/10/17
I've got a 12 gauge and an AR15 for home defense. Plus some notiers01/10/17
Is the deduction worth the risk of an audit? It sounds like isthisit01/10/17
Over one thing, I don't think there'd be much risk, but your qdllc01/11/17
I mean, you get to submit whatever you want. A taxpayer coul joecoder01/11/17
Had this discussion with my CPA a few weeks ago. If solely f newsolo01/11/17
Thank you! I knew I couldn't be the first person here to con bbkbbk01/11/17
I've bought cameras, video systems, laptops, a motorcycle, e qdllc01/12/17
Video cameras are a big help in home defence. i personally homerbluth01/12/17
Buy $1k video security online and return it. Then buy gun. 2ski01/13/17
What is the purpose though? You won't save any significant a unemployedalcoholic01/13/17
The point is using pre-tax money (s-corp only pay taxes on m bbkbbk01/15/17
It's about using the "rules" of the system to eliminate as m qdllc01/16/17
Ok. But with an S-corp tax is only paid on the salary I get bbkbbk01/16/17
bbkbbk (Jan 9, 2017 - 5:28 pm)

I've been doing a little research on the 'net and I plan to ask my accountant, but I wanted to see if anyone had done the same before paying my accountant to look like an idiot. Every year I sit down with my accountant I come out feeling foolish. I don't know how people do all this tax stuff as a practice area. Anyway.

Can I buy a gun with company funds if the gun is for "protection" and is kept at the office 100% of the time? Would it be a deductible expense? What about the ammo?

Reply Like (1)
qdllc (Jan 10, 2017 - 9:44 am)

Not an accountant, not a CPA, but my business experience is that the IRS is very lax on what qualifies as a "business" expense. It's a very abused aspect of the tax code, and lots of big businesses do it. I even know a family business with a home in the Cayman Islands they vacation at that's a business asset and expense (they entertain business clients there).

A business can purchase most anything it wants if it has an arguably-legitimate business use. So long as that is present, the IRS won't bat an eye at it. It is helpful if an asset is listed in more vague terms (e.g., security vs. Glock 10mm).

Reply Like (0)
mtobeinf (Jan 10, 2017 - 9:52 am)

Glock 19 broke my thumb. I have a hitcher's thumb and the slide kicked it just right and took off the top of my finger nail. Apparently it's called M1 thumb. Switched to revolvers ever since. Much bigger fan of the revolver

Reply Like (0)
bbkbbk (Jan 10, 2017 - 1:03 pm)

My "home" pistol is a .38 special revolver. I was thinking of a 9mm for the office since I don't plan on actively carrying it anywhere I'm not too worried about "concealability".

Reply Like (0)
notiers (Jan 10, 2017 - 2:21 pm)

I've got a 12 gauge and an AR15 for home defense. Plus some other less "tactical" rifles.

Reply Like (0)
isthisit (Jan 10, 2017 - 3:04 pm)

Is the deduction worth the risk of an audit? It sounds like a business expenses to me but I can definitely see the IRS giving this a second look if the mood is right.

Reply Like (0)
qdllc (Jan 11, 2017 - 7:05 am)

Over one thing, I don't think there'd be much risk, but your tax preparer should be able to detail your odds of getting a random IRS audit (more common). If you had many sketchy "expenses" or assets listed as business property, that would be an issue.

Also talk to other businessmen who do something similar. There's unwritten rules about what you can and can't realistically write off as a business expense, and more experienced businessmen know better about where the lines are drawn. I kid you not, another employer gets new iPhones for all upper management as soon as it comes out because it's a business expense (even though they use the phones a lot for personal use). Unless the IRS has an axe to grind against someone, they don't really look that close unless something raises a red flag.

Reply Like (0)
joecoder (Jan 11, 2017 - 3:43 pm)

I mean, you get to submit whatever you want. A taxpayer could send in a return that says "security system - $999" for a deduction.

Their risk, in that situation, is if they get random audited and had to submit receipts.

That's when one would have to argue for/against a gun as a security system.

Reply Like (0)
newsolo (Jan 11, 2017 - 6:20 pm)

Had this discussion with my CPA a few weeks ago. If solely for the for the office, he believes the deduction would be fine.

Reply Like (0)
bbkbbk (Jan 11, 2017 - 6:30 pm)

Thank you! I knew I couldn't be the first person here to consider doing this. I really appreciate the info.

Reply Like (0)
qdllc (Jan 12, 2017 - 8:08 am)

I've bought cameras, video systems, laptops, a motorcycle, etc. All in the business' name. I get to pay the business tax rate too (down side). Yes, if I got audited, I might have gotten in trouble, but seeing what others were allowed to do (in my area) made me realize that only if I was bringing in a LOT of income and writing off TOO MUCH would I likely get any attention.

Keep in mind the IRS chiefly targets people, not entities. You can't threaten an entity with imprisonment, so the chance of "bullying" a big check to resolve the audit can't happen. When it's a sole proprietorship or individual return, then they have you by the short hairs. Not that business entities don't get audited, but the IRS is more inclined to do it only if they think there's a high probability of cashing in.

After all, it's not about compliance...it's about getting more money, and audits are not cheap for the IRS.

Reply Like (0)
homerbluth (Jan 12, 2017 - 11:19 am)

Video cameras are a big help in home defence. i personally have a 12 gauge and a handgun.

Reply Like (0)
2ski (Jan 13, 2017 - 11:17 am)

Buy $1k video security online and return it. Then buy gun. Original receipt to deduct for the records.

Nevermind, that would be illegal.

Reply Like (0)
unemployedalcoholic (Jan 13, 2017 - 7:38 pm)

What is the purpose though? You won't save any significant amount of money and you'll still have to register the firearm to your name. Is there something I haven't thought of?

Reply Like (0)
bbkbbk (Jan 15, 2017 - 4:00 am)

The point is using pre-tax money (s-corp only pay taxes on money paid to the member(s) in wages or distributions) to buy the item means I can use $100 (for example) the company earned to buy a $100 gun instead of having to earn $100+taxes to spend $100 on the gun if I bought it using my individual money. At least that is my understanding. I might be wrong. That has definitely happened before.

Reply Like (0)
qdllc (Jan 16, 2017 - 7:54 am)

It's about using the "rules" of the system to eliminate as much of your tax burden as possible. Everything that can be bought by a business as a legitimate business expense comes off the gross income. Businesses only pay taxes on net income.

People are assessed tax based on gross income.

Reply Like (0)
bbkbbk (Jan 16, 2017 - 4:54 pm)

Ok. But with an S-corp tax is only paid on the salary I get as an "employee" and money from distributions as an owner. And I pay those taxes personally. Money left in the corp is not taxed at all (again, this is my understanding and I might be getting it wrong). Doesn't that mean corp spending is done with tax free money since the money isn't taxed until I give it to myself through my "reasonable salary" or distributions? Because if the money is spent on something it can't go to me and therefore can't/won't be taxed.

Reply Like (0)
Post a message in this thread